Estafa through failure to return


The words "misappropriate" and "convert" as used in the law on Estafa connote an act of using or disposing of another’s property as if it were one’s own or of devoting it to a purpose or use different from that agreed upon. Misappropriation or conversion may be proved by the prosecution by direct evidence or by circumstantial evidence.

According to the Supreme Court, in the case of People v. Manantan, in an agency for the sale of jewelries, it is the agent's duty to return the jewelry upon demand of the owner and failure to do so is evidence of conversion of the property by the agent.  In other words, the demand for the return of the thing delivered in trust and the failure of the accused to account for it are circumstantial evidence of misappropriation. However, this presumption is rebuttable.  If the accused is able to satisfactorily explain his failure to produce the thing delivered in trust or to account for the money, he may not be held liable for Estafa.

Manantan received in trust the jewelries from Carilla for the purpose of selling them within two weeks from receipt thereof; and to remit the proceeds to Carilla within two weeks after the sale or to return the jewelries in case they were not sold. It was also agreed that Manantan will earn from any amount that she would add to the original sale price of the jewelries fixed by Carilla. This, in effect, created a fiduciary relationship between Carilla and Manantan.The absence of a written document showing receipt of jewelries or other property in trust does not necessarily mean that no such contract exists between the parties. Contracts can be made orally for as long as there is a meeting of the minds of the parties thereto. Carilla positively and categorically testified on the transaction that transpired between him and Manantan.

Manantan misappropriated Carilla’s properties, which she held in trust, by failing to remit the sale price of the jewelries or return the same to Carilla upon the expiration of the stipulated period, despite repeated demands by the latter. Manantan issued checks to Carilla as supposed payment of the sales proceeds of the jewelries but these checks were dishonored. Carilla hired a lawyer and sent a demand-letter to Manantan but the latter still failed to turn over the jewelries or the sale prices thereof.

Failure to account upon demand for the return of the thing delivered in trust raises a presumption of misappropriation. Manantan’s bare denials are not sufficient to overcome such presumption. Estafa may also be committed by denying untruthfully that the thing was received. Manantan denied having received jewelries from Carilla. However, as already determined, such denial is unsubstantiated and therefore cannot prevail over the categorical declarations of Carilla that the jewelries were turned over in trust to Manantan. Hence, Manantan’s denial of the receipt of jewelries also constitutes Estafa. (People v. Manantan. G.R. No. 156248. August 28, 2007)

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